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Foreign bidders scoop up real estate remnants like bulldozers and dump trucks

In a 1,000-seat open-air auditorium, the middle-aged auctioneer rat-a-tat-tats through a series of quickly escalating prices.

"Look at the rubber on this little puppy," he says as a Caterpillar wheel loader rolls onto the auction runway atop chest-high black tires.

Within a minute it's sold for $72,000 and another loader, hoisting an iron bucket capable of handling 600 gallons of dirt, takes its place.

"One hundred thousand! Let's rock and roll!" the auctioneer patters.

In 30 minutes, he has moved more than a million dollars worth of heavy-construction equipment. By the end of two days, he and his companions will have cleared the 200-acre lot of more than 2,700 pieces of "iron" worth an estimated $35 million and shipped them to Egypt, Colombia, Australia and other places.

Excavators. Bulldozers. Dump trucks. Pickups. Steamrollers. Concrete mixers. Road scrapers. Even golf carts.

It's boom times for Ritchie Bros. Auctioneers, which holds the world's largest heavy-equipment auctions three times a year west of Orlando.

In the past couple of years, Florida has lost about 200,000 construction jobs as new-home sales plunged 80 percent. As a result, many construction companies are hungry for cash. Selling their unused equipment helps get them through the hard times. Much of the equipment is relatively new — model years 2004 to 2007 — another sign of how desperate things have become.

"People aren't using their equipment these days. They'd rather turn it into cash," said Steve Kriebel, who runs the show at Ritchie's operation.

That's how backhoes and bulldozers from Graham Brothers Construction landed on the Ritchie Bros. site.

Graham Brothers, a Georgia contractor with a large office near Ocala, has earned hundreds of millions of dollars moving earth across Florida building sites, including New Tampa's Live Oak Preserve and the Villages, the gigantic retiree community in Wildwood. But the building slump and deep recession have forced it onto a diet.

It has way more iron than it needs.

The 49-year-old company has had to sacrifice the very ribs and backbone of its company and ship it to the Middle East, Europe and South America.

"Over the last several years, our company's acquired a lot of heavy iron assets. But the economy's down and it's underutilized," Graham Brothers' Robert Rinker said.

• • •

The auction is very much an international affair these days.

The auctioneer takes bids on hundreds of tractors and dozers that wheel by. Internet bidders compete with hundreds of live bidders. Almost half the attendees hail from Latin America.

"They're all going on the same boat to Australia!" the auctioneer proclaims after a series of newish yellow Volvo articulated dump trucks sell for about $40,000 apiece.

"Headed to Ireland. Ireland bound!" he says as a Volvo earth loader belches its way off the auction runway.

In the lobby of the auction center, world clocks show the times in Dubai, Vancouver, Singapore and Brisbane. TV screens flash running results of a second, smaller auction Ritchie holds on a back lot. In one sale, a bidder from the United Arab Emirates tops a competitor from Jordan to win a pavement striper for $3,500.

"Our buyers come from all 50 states, 40 countries and most of the provinces of Canada," Kriebel says.

As surplus construction equipment flooded the market the past two years, prices plunged 35 percent, buyers said. And for bidders overseas, the dollar's weakness against foreign currencies sweetens deals even further.

Auction buyer Milton Barreto, a native of Colombia who runs M&Y Barreto's Painting in Orlando, scooped up a bulldozer and a dump truck.

A buyer from Panama paid $3,000 for a piece for concrete mixing equipment that sold new for $150,000. Another buyer, a contractor from Jacksonville, landed a Japanese-made Komatsu excavator that sold new in 2007 for $260,000. At auction, he paid $70,000.

"Stuff is so cheap here that even after shipping you can make 20 to 25 percent profit if you resell in Colombia," Barreto said. "The same thing is true in Mexico."

Signs of seller insolvency abound. A truck labeled Florida Trucking rumbles by. It is owned — or was formerly owned — by Tampa contractor Bing Kearney. His company filed for Chapter 11 bankruptcy this year.

The same thing happened to Palm City's Big Johnson Concrete Pumping Inc., which was selling a hose truck used to pump wet concrete to the upper stories of condo high-rises.

A double row of 350 golf carts stretched a quarter mile across Ritchie's lot. Owned by a finance company, some carts had been repossessed from troubled golf courses.

But all of it sells. Ritchie Brothers is a "no-reserve" auctioneer. The high bidder always wins.

Graham Brothers worries that the sale of so much iron could leave it unequipped for a real estate turnaround. Many of its financial struggles are tied to unpaid bills from the likes of Transeastern Homes, the defunct builder of Live Oak Preserve.

Rinker realizes his company's loss of superfluous equipment is a foreign contractor's gain. But he's philosophical.

"It's sad. It's unfortunate," Rinker said. "But you've got to improvise, adapt and overcome.''

Foreign bidders scoop up real estate remnants like bulldozers and dump trucks 10/17/09 [Last modified: Tuesday, October 27, 2009 3:18pm]
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